(1) An HMF loan shall:

(a) provide for complete amortization at maturity through substantially equal monthly payments of principal and interest;

(b) have an amortization period not to exceed 40 years and a term not to exceed 30 years, both as approved by the board based upon the loan amount, additional project funding sources and obligations, and other relevant factors;

(c) bear interest at an annual rate:

(i) not less than 2% for a project that is for households of 30% or less of median income in the area;

(ii) not less than 3% for a project that is for households between 31% and 50% of median income in the area;

(iii) not less than 4% for a project that is for households between 51% and 80% of median income in the area;

(iv) not less than 6% for a project that is for households between 81% and 95% of median income in the area; and

(v) a rate blended from those rates provided for in (1)(c)(i), (ii), (iii), and (iv) for a project that contains units for different area median income household groups.

(d) be subject to a late charge of 4% of the monthly payment due for each monthly payment that is not made within 15 days of its due date; and

(e) be secured by a lien (perfected either by a mortgage or a trust indenture) against the real property benefited by the loan.

(2)  As a condition of the loan, the project owner must commit to income targeting and maximum rent requirements and restrictions and related transfer, compliance, and enforcement restrictions, through execution and recording of a regulatory agreement establishing such provisions as covenants running with the project property for the longer of thirty years or the duration of the loan obligation.  The board may waive such requirement if the project is subject to a substantially similar agreement in favor of the board under the Housing Credit or another board loan program.

(3)  The board may approve HMF loans:

(a)  to provide permanent financing, with loan closing and disbursement occurring after completion of construction and three months of stabilized occupancy; or

(b)  on a case-by-case basis, to provide financing prior to completion of construction, where the applicant demonstrates and the board finds additional public benefit from such financing compared to funding from other existing and available funding sources with substantially similar terms and conditions, such as but not limited to allowing project financial feasibility or providing for an increased number of affordable housing units. As a condition of approving such pre-construction financing, the board may require additional security, risk management measures, and other loan terms, including but not limited to additional collateral and third-party construction and disbursement monitoring obtained or provided and paid for by the borrower, investor, or other lender.